Tuesday, February 15, 2011

::China Inflation January Translucent 4.9% As Food Prices>>

Go Finance Reporting in Beijing - China Inflation January increasingly depressed food prices are increasing. This makes China should balance the cost of living with interest rates, and perform other actions.

Based on the data quoted by the Associated Press (AP), Tuesday (02/15/2011), inflation rate for January was recorded at 4.9 percent driven by rising food prices around 10.3 percent from the previous in December last only approximately 4.6 percent.

Central Bank of China has raised interest rates three times since October last year. Where it is done to cool the faster economic growth and stabilizing inflation.

"The government is currently struggling with all kinds of ways to see the back problems that have occurred previously. In addition, to this very day still have not seen inflation peak," said an economist from Standard Chartered Bank Jinn Yan.

Besides food, there are also political concerns about inflation which is very dangerous for the Chinese government because the resulting economic benefits society undermine and threaten the acceptance of China's communist government. In addition, the result of rising food prices, the poorest families in China have to spend up to half of their income for food.

The government has set a target inflation rate to four percent this year. But analysts expect the private sector will reach six per cent, which will include a sharper increase for food.

China National Statistics Bureau reported on in January, fresh fruit prices jumped approximately 34.8 percent more than the previous year. Meanwhile, the price of eggs has increased approximately 20.2 percent.

Economists say the Chinese government was too slow to respond to China's inflationary pressure after recovering from the global financial crisis in 2008.

In addition, the economic growth that occurred up to 9.8 percent in the last quarter of last year expected to slow this year, but will remain strong where it is supported by high demand for food goods.

Global Source, a supplier company that connects China with foreign customers say if this week based on a survey of 232 Chinese firms found 74 percent of them to raise prices last year, some of which raise the price to 20 percent.

Finally, higher inflation also may lead the government to slow the rise of its currency, the yuan against the U.S. dollar which is to help its exporters to compete. (GoFinance)

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